Can AI Review a Contract? It’s Like Asking Advice from a Business Uncle

More and more, people are pasting agreements into chatbots and ask for redlines, negotiation advice, or “what should I change?” Sometimes that helps. But it can also create false comfort.

A good way to think about it is this: using AI for contract review is a bit like getting help from an extremely confident uncle with some business experience, who doesn't ask many questions, and struggles with nuance. It may give you some useful perspective and fast feedback. But it doesn't really provide thoughtful legal judgement.

AI Chatbots Are Pretty Good At:

1) Big-picture contract summaries

AI is good at giving the big picture of a contract and outlining the main sections. That’s useful for basic orientation - especially with long agreements.

2) Translating legalese into plain language

AI is good at translating dense legal wording into something easier to read. This can make contracts feel less overwhelming and easier to engage with.

3) Comparing drafts and versions

AI is great at comparing contract drafts and flagging changes between versions. If you’re tracking edits, new clauses, or small wording shifts, this can save a lot of time.

AI Chatbots Are Not Good At:

1) Drafting solid contracts

AI will confidently draft contract that covers only surface-level issues. It often misses what actually matters in your deal. Generic contracts are a huge missed opportunity and don't add value to your business.

2) Asking the right questions

Contract negotiations are contextual. Without context, it’s impossible to spot what should be included, clarified, or constrained. Every deal is different, and AI struggles with nuance because it doesn’t reliably ask the follow-up questions that uncover the real issues.

3) Saying “it depends”

Good legal advice is almost always conditional. AI tends to provide neat, definite answers when the honest answer is “it depends.” Because contract negotiations depend on a so many different factors - leverage, industry norms, the parties, emotions, relationships, and what you’re trying to protect.

4) Industry standards and negotiation norms

In creative-industry contracts, “standard” is not universal. It varies by role (artist/producer/writer), deal size, territory, bargaining power, and the opposing party. AI doesn’t negotiate deals in the real world, so it can’t reliably distinguish between normal market terms and quietly extreme ones.

The Practical Way to Use AI for Contracts

If you use AI like you’d use a business-savvy uncle, it can be genuinely helpful:

• Use AI for speed: summaries, clause translation, draft comparisons

• Don’t use AI for judgment: what to accept, what to push, what’s market, what’s risky

• Treat AI output as a starting point, not an answer

This is not legal advice. Need help drafting, reviewing, or negotiating a contract? Contact hello@outputlaw.com.